As the Biden administration inches closer to a final decision on whether to erase billions in student loan debt, House Republicans have introduced an alternative proposal.
The bill would reform certain aspects of the federal student loan system, including simplifying repayment methods, decreasing the impact of interest and establishing new borrowing limits. Republicans have long argued that President Biden does not have the authority to enact sweeping student loan cancellation, and that debt cancellation would do little to reform the system that places students in debt in the first place.
Republicans have argued that borrowers should not be able to take out excessive student loan debt for programs that do not yield postgraduate incomes sufficient to cover their student loan debt. The bill would establish loan limits for graduate borrowers, barring graduate students from taking out more than $25,000 a year and no more than $100,000 for the duration of their program.
The bill would also eliminate Graduate PLUS loans, which allow graduate students to borrow up to the total cost of attendance for their program, and the Public Service Loan Forgiveness program, which provides debt relief to borrowers working in public service jobs, such as teaching, nursing or military service, after making 120 payments. As of June 2022, $8.1 billion in student debt has been canceled for 145,000 borrowers through PSLF.
Amy Scott, associate vice president of government relations and public policy at the Council of Graduate Schools, said, “The proposed elimination of [Graduate PLUS loans] for new borrowers would not only disincentivize prospective students from pursuing a graduate education but could have detrimental impact on meeting state and local workforce demands that require a graduate degree.”
President Biden has said that he plans to unveil his debt relief plan by the end of the month, right before the current pause on loan repayments is set to expire. Although the president remains undecided on his final plan, a recent Politico article reported that the Education Department is prepared to deliver Biden’s debt-relief plan as soon as the president gives the thumbs-up.